Are you thinking of selling your home without agent representation? Among a minority of sellers this is a popular option when sellers perceive they are saving money on a transaction. After all, one of the motivating reasons for selling on your own is to walk away with more money in your pocket.

Perhaps you’ve bought and sold homes using agent representation and you don’t see the value of the work they did, so why shouldn’t you do it yourself? Maybe you had a bad experience and felt the commission you paid was not worth the hassle. This in and of itself is very disconcerting considering the behind the scenes work your agent may have done that you were not aware of.

My most recent experience with representing a buyer in a For Sale By Owner (FSBO) transaction reminded me of why it is so important to hire the right agent to sell your home.

The seller in this case seemed to have priced the home competitively according to my market research. I started a conversation with the seller and found out her primary source of advice was her sister, a licensed agent in Texas. California and Texas real estate laws differ greatly. The seller declined to consider signing a single party listing agreement with me because of the advice she was receiving from a family member licensed outside of California.

Not a big deal…I continued forward with negotiations representing my buyer only and sent her the Non-Agency Representation Agreement along with my client’s offer to purchase the home. A day later we received the seller’s counter offer…it was on an outdated form. I had to send it back to her explain the form was outdated. She couldn’t “find” the current forms so I sent her an updated form to sign and send back.

Lesson #1…CAR (California Association of Realtors) forms are not available to the general public unless you pay per form and can be difficult to know which ones to use because there are so many. They are also expensive considering how many forms a seller must complete in the disclosure process. Most sellers don’t know this or where to even look. There are hundreds of forms and revisions and new forms are required constantly.

Lesson #2…Advice from an out of state licensed agent is not the same as hiring the right agent licensed in your state to do the job.

During many of our conversations the seller stated advice she had received from the Texas agent and it was not consistent with California real estate laws and procedures. This could have landed her in hot water legally because of the thorough disclosure process that occurs in California. Relying on incorrect information could have caused her not to disclose material facts about the home, property, title, etc. I would hate to see this happen to you and be served with a lawsuit for which you could be responsible to pay thousands of dollars in attorney fees and settlements. It’s just not worth it for the sake of protecting your financial future.

By representing herself the seller potentially “saved” $9,750 (give or take another half percent) in commission paid to a listing agent. But in the end she ultimately lost money which far outweighed the “saved commission”. After the sales price was negotiated the lender’s appraisal indicated that the actual market value of the home was $30,000 higher than what the seller agreed to for a purchase price. The seller could have had $20,250 more in her pocket at the end of the transaction if she had hired a Realtor who would have protected her best interests.

Can you afford to lose $20,000 on the sale of your home? You are probably saying “NO”! I agree!

If this hasn’t convinced you to contact me to help you sell your house, then here is a little more information to consider.

Firstly…Bad experiences are bound to happen because humans are involved. No matter what, it should never be your agent who creates the problem. Problems will arise within a real estate transaction and your agent has been hired to be a problem solver. How do you avoid risking a bad experience? Interview multiple agents, ask the right questions and ask for references from past clients. Then do your homework.

Research online reviews and find the dirt. You can even check with the Bureau of Real Estate to find out if there are any complaints filed against agents you are considering. The details of these complaints are not available, however; just knowing they are or are not there lets you know what kind of experience you may be heading into.

Research the broker the agent is working under and find recent news and reviews about their financial stability or complaints that may have been filed against them.

Secondly…There are many reasons sellers don’t see the value in hiring a Realtor to sell their home and paying them an average of 5-6% of the selling price to compensate both your agent and the buyer’s agent.

Lack of communication

Lack of marketing

Bad pricing advice

Too much time on the market

Poor customer service

Less than average negotiation skills

Passing responsibilities to inexperienced agents/assistants

Lack of timely responses to your calls/inquiries

I’ve heard over and over again from prospective FSBO sellers that these are the most common reasons they would rather represent themselves aside from the commission they pay. While all of these are unfortunate, the Real Estate Agent community should take notice and simply do better!

Lastly…whether your expectations of your listing price are higher or lower than the average market value, you owe it to yourself to consider the financial benefits of hiring an experienced agent to help you net the most profit possible. Commission aside, the right agent will help you expertly navigate through the process and help avoid possible legal repercussions.

To recap, whether you are trying to save money on commissions, avoiding the frustration of hiring the wrong agent and the possibility of future legal ramifications I highly recommend that you research all your options and hire me to protect your best interests.

I trust this post has been helpful for you and that you will call me right away to talk about all your options. I am there for you because I care!

Don’t let an FHA appraisal kill your deal. FHA loans are federally funded mortgages and come with stricter underwriting and property condition requirements. While preparing to sell your home it can be easy to overlook some property conditions to get your house on the market fast.

When you accept an offer from a buyer with FHA financing keep in mind that in addition to their own inspections the appraiser may note repairs that the appraised value is dependent on. In this case the lender will require repairs before loan documents are released or the loan is funded.

Prepare your home for sale, don’t just clean the carpets and put our deodorizers. Get a home inspection and pest inspection!

Ask the inspector to go through the home with a fine tooth comb to point out any safety issues that could cause you to have to negotiate repairs and in some cases the purchase price of the home. Pest inspectors will point out areas where termites may be present causing damage and/or areas of dry rot that will need to be replaced. Providing a Section 1 & 2 clearance to your Realtor when you list your home will increase the perceived value of your home. Roof inspections are also vital.

Buyer agents will know the home is in tip top shape and encourage their clients to offer higher purchase prices. This also saves you time and frustration during the contract period not having to negotiate repairs and money you might have to spend to close the deal.

HUD approved appraisers are required to confirm property value and inspect health and safety inspections. Here are a few things HUD appraisers will be looking for…

Chipped or peeling paint

Exposed wood siding/trim

Stucco cracks larger than the width of a quarter

Evidence of arcing or smoke/burning in the main electrical service box

Loose handrails

This list is not all inclusive of areas of concern may arise. Please refer to the HUD Inspection checklist at fhahandbook.com for more information.

Landscaping can even present an issue…there must be sufficient slope to allow water to drain away from the house. Standing water in your yard may be indicative that there is not enough slope to drain the water away from the home.

Attic spaces may also present a problem if a full attic inspection is required. Let’s be honest with ourselves, how many times do you go into your attic to make sure there are no leaks or undiscovered damage?

The competition for pricing your home to prepare you to receive multiple offers over your list price depends on how ready your home is to sell and whether buyers will have the confidence in the property’s condition.

For more information on selling your home and its market value contact me at brandy.christensen@kw.com or call me at 916-600-1239.

Everything will sell for the right price! I know…it is tempting to want to price your home for a price you think is realistic. That price is sometimes too high!

You say, “But, I know my house is worth more than my neighbors and that’s what I should get for it.”

And I say, “That’s great and very well may be true…let’s take a look and see what other homes just like yours are selling for.” Because only one thing determines the value of your house in today’s market. It isn’t how much money you need to profit after closing costs. It isn’t an emotional value because of the family memories, blood, sweat and tears you’ve poured into your house. It isn’t what your friends say it is worth. It isn’t even what a real estate agent says it is worth.

It IS worth what other homes just like yours are selling for within your neighborhood.

You ask, “Why?”

I say, “Have you heard of a mortgage?” I’m sure you have and you most likely still have one that you need to pay off when you sell your house. A mortgage requires an appraiser to determine the value of the house for the lender to provide money to any potential purchaser of your house.

This is important because if the appraiser doesn’t find any homes in your neighborhood that have sold for the price you want then they are legally and ethically obligated to report a lower value to the lender. There are ways to negotiate a higher than appraised price for your house. That is a negotiation tactic not related to an agreed upon listing price. When we look at this from a buyer’s perspective, why would we want to pay more for a house than the appraised value and start with negative equity? We can NEVER predict what will happen with tomorrow’s real estate market and would be a poor choice for any buyer.

You say, “What about cash buyers?” Cash buyers are not exempt from obtaining an appraisal except when the property is majorly, physically distressed. Experienced cash buyers will pay for an appraisal and negotiate the right price.

Back to the original point…EVERY house will sell for the right price!

Pricing also takes into account other factors. Location is very important. Is your house located on a busy street or a cul-de-sac? Is your house behind a busy shopping center or in the heart of your neighborhood? What amenities does your home have that others may not have? Does your house have curb appeal or is the front yard a wreck?

I trust this information is helpful and gives you a balanced perspective on how buyers view market value.

When you are ready to sell our house and just met with a Realtor you might be shocked by the numbers on the net sheet they include with their presentation. Let’s look at the facts…the greatest expense when selling your home is that one line…COMMISSION!

Before you have a panic attack let’s talk about another fact…the time and expense your Realtor is about to embark on to market your home is not guaranteed to be compensated to them. Your house could potentially not sell due to any number of factors including price, location, condition, market, etc. Your Realtor is taking a risk in spending their own capitol on marketing your house with no guarantee of it selling and getting paid.

Let’s look at another fact…behind the scenes. Your Realtor is spending valuable time and resources prospecting for buyers and other Realtors with buyers. He or she (if they are like me) is making phone calls, knocking on doors, sending out mailers, holding open houses and paying for social media advertising to generate traffic (buyers) to sell your house. The countless hours spent on these efforts are all without guarantee.

You might even be thinking, “I should check with another Realtor to see if I can pay less commission to sell my house.” Just imagine working your full-time job and your employer says to you, there is no guarantee you will be paid for your work. And, you know, I’m just going to transfer your job to another person who will do it for me for a cheaper salary. Do you feel your time and skills are work that paycheck? Because you are worth that paycheck then you will find a company that will pay you what you’re worth. I am the same way, the commission is a representation of what my time and skills are worth to you.

Let’s talk about another important fact…the agent that charges you the least amount of commission will be more likely to spend very little time actively and aggressively marketing your house to sell it. That agent will also be more likely to negotiate a lower price for your house leaving you with less money in your pocket. Agents who charge less commission are less concerned with the quality of buyers than they are about the quantity of their listings.

Ok, here’s the last fact for today…commission is shared with cooperating agents who bring buyers with offers. Commission is also shared with the Broker’s involved in the transaction. Don’t forget about the IRS, they want their cut too! Add all this up along with the marketing costs and the Realtor is only left with a percentage of the total commission to support their family.

Here are some questions to ask about commission before listing with a Realtor:

What percentage of this commission is budgeted for marketing my house?

Where is the greatest money being spent on advertising my house for sale?